Malaysia Extends Transitional Period for Transitioning Entities
The Malaysian Accounting Standards Board has decided to allow agriculture and real estate companies, including its parents, significant investors and venturers (Transitioning Entities) to defer the adoption of the MFRS Framework for an additional year.
This deferment takes into account the latest status of the IASB’s work plan on the two transitional issues that have yet to be resolved. Transitioning Entities continue to have the option to either apply the MFRS Framework or the FRS Framework for annual periods beginning on or after 1 January 2014.
In November 2011 the Board published the MFRS Framework, an 1IFRS-compliant set of accounting standards, applicable to all non-private entities with effect from 1 January 2012. Transitioning Entities have been given the option since then to either apply the MFRS Framework or continue with the FRS Framework in view of the outstanding issues on both MFRS 141 Agriculture and IC Interpretation 15 Agreements for the Construction of Real Estate.
Transitioning Entities that had elected the option to apply the FRS Framework are required to comply with the MFRS Framework for annual periods beginning on or after 1 January 2014.
According to the latest IASB’s work plan as of 29 July 2013, new Revenue Standard which was expected to be issued in the second quarter of 2013 has been delayed to the third quarter of 2013.
As to the proposed limited-scope improvements to IAS 41 on bearer plants, the IASB published an Exposure Draft Agriculture: Bearer Plants in June 2013 with a 120-day comment period ending on 28 October 2013.
The IASB will start the re-deliberation of the proposal on bearer plants in the first quarter of 2014.
In light of this development and the revisions of the project timeline by the IASB, the Board has decided to extend the transitional period for another year, such as the adoption of the MFRS Framework by all entities for annual periods beginning on or after 1 January 2015.
"The Board believes extending the transitional period for another year will provide Transitioning Entities adequate time to implement the new Revenue Standard and to avoid the possibility of repetitive substantial restatement in the financial statements in the event the proposed limited-scope improvements to IAS 41 on bearer plants do finally occur as currently anticipated by the Board," says the MASB.